Everything Old Is New Again, and Nonprofits Should Stay That Way

A couple of weeks ago, I received a press release about the new Palindrome Advisors group with the subject line, “Redefining the Nonprofit Model.” Doubtless, you’re all familiar with the genre: A group of business people get together and decide that the nonprofit sector hasn’t cured cancer or ended poverty because people in the nonprofit sector are inadequate, and that an infusion of good old hard-headed American for-profit business practices will compensate for that. Voilà: instant Great Society!

This particular redefinition is truly revolutionary:

One hundred advisers, including many of Silicon Valley’s elite, are coming together to disrupt the nonprofit space….[They] have committed to one full year of serving on the board of a nonprofit….[and] attending monthly salons where they will discuss the specific pain points of their assigned nonprofits and attempt to find solutions as a team….[This] is part of a larger movement . . . to make the nonprofit world more efficient….[Founder Zaw Thet states,] “This is just the start of how [we] will disrupt the nonprofit sector and create new, innovative ways for business leaders to contribute….Before [this], there was no easy path for nonprofits to find experienced leaders to help them at a board management level. A board role is not just about fundraising, but includes developing growth plans, operational efficiency, cause marketing, customer relationship management, event planning, and much more.”…In order to maximize results, [the group] carefully matches advisors to nonprofits based on their skills, interests and a nonprofit’s needs.

So let’s review: A bunch of business people are going to sit on nonprofit boards of directors! And then periodically those business people will get together and talk about how to be better board members!  As board members, they will not only fundraise, but also contribute their skills! They’ll join boards based on their interest in the nonprofit’s mission! And they’ll seek ways to improve the whole sector!

The accumulation of these radical notions caused me to swoon, but the one idea that really had me down for the count was that the entire purpose of the endeavor was to “disrupt the nonprofit space.” Do nonprofits that are trying to serve their clients really need disruption in their management to supplement the disruption of funding they constantly face, the disruption of their staff produced by those funding crises, and the disruption of their ability to operate smoothly or to secure resources when their message is being drowned out by a constant drumbeat of demands for “reinvention”?

As I fanned myself back to consciousness, I was struck once more. This time the weapon was yet another article about hybrid corporate forms designed to enable nonprofits to earn their own revenue and stop “begging.” Whether the discussion purports to be about Low Profit Limited Liability Corporations (L3Cs) or public benefit corporations or triple bottom lines, the argument is always the same: Nonprofits should just get with the capitalist program, identify lucrative markets, and earn their keep like every other good red-blooded American.

This approach ignores the fact that nonprofit markets usually consist of clients who are not profitable to serve—because if they were profitable to serve, the for-profit sector would be serving them. The better a nonprofit is at finding and serving its market, the poorer it will be, because though for-profit clients are a profit center, nonprofit clients are a cost center.

These two news items have one thing in common: They ignore the fact that what nonprofits need isn’t more advice, it’s more money. When business people are ready to provide that—when they’re ready to serve on boards, not as agents of disruption but as securers of resources, and when they’re ready to advocate for a tax system that will underwrite the necessary work done by the voluntary sector—well, that will be news.

Read more stories by Kelly Kleiman.